With the number of shop closures spiralling and the volume of vacant premises unlikely to attract new businesses, the recovery of Swindon's retail sector will be a challenge, says Andrew Kilpatrick of Kilpatrick & Co.
After the last year, when every economic and property market commentator found their predictions for 2020 blown violently off course by the onset of the global pandemic of Covid-19, you may wonder what lies ahead for 2021.
Obviously, the impact on the economy and the commercial real estate sector depends on whether and how soon the pandemic can be brought under control and how quickly the national vaccination scheme can be implemented, both in the UK and across our trading partners.
The outcome of Brexit and any trade deal adds another layer of uncertainty on anyone brave enough to make predictions for 2021. Swindon’s retail sector, like elsewhere in the country has suffered from the various retail receiverships with Debenhams, Adams, John Lewis, Topshop, Bon Marche, etc. all closing in Swindon as well as Morrison’s and Sainsbury’s supermarkets leaving the town centre.
Whilst the pandemic has boosted online retailing, the volume of vacant shops is unlikely to encourage footfall in the town centre and entice new retailers to open up. Whether some shops can be converted to alternative uses, such as click and collect venues, remains to be seen, but recovery of the high street is going to be quite a challenge across the country.
Swindon is lucky in having the Outlet Centre, which still seems to be attracting a good volume of visitors by the look of the queues of traffic leading up to Christmas.
In the office sector whilst in the short-term businesses may be looking to re-evaluate their space requirements to save costs and respond to the increase in home working, many businesses have recognised through the first two lockdowns the attraction of offices as a key space for collaboration, relationship building, mentoring and spontaneous innovation opportunities.
2021 may see a growing demand for offices capable of accommodating flexible working closer to home, possibly boosting regional office demand in towns like Swindon, with its good accessibility to the rail network for visits to a London head office.
Luckily, Zürich’s plans for 100,000 sq ft head office at Kimmerfields in the town centre seem to have survived the pandemic, with construction due to commence in 2021.
The industrial/warehouse sector has been least affected by the pandemic and economic downturn, with just in time suppliers seeking flexible warehousing opportunities close to major centres of population.
There has also been significant big box take-up, which has seen Amazon commit to a new monstrous, multilevel 2.3 million sq ft warehouse to be built on the outskirts of Swindon at Symmetry Park, due for completion by the end of 2021.
In the investment sector with interest rates expected to remain low, investors are seeking investment opportunities providing good rental income and yields. Industrial/warehouse investments are most sought after as was seen when a six unit industrial investment near Cirencester recently sold at auction for a price 50 percent above its guide price.
Conversely, retail investments are well out of favour, for example a block of five shops, just off the prime pitch in Regent Street, Swindon are heading for auction with a guide price of over 15 percent. Long term that might prove a bargain!
In the residential sector, whilst office to residential conversions have been prevalent for some time in Swindon, news comes of WH Smith’s proposal to release their distribution warehouse centre at Greenbridge for up to 228 houses on a 15 acre site, adjoining another site where they have already got planning permission for 134 houses.
2020 has also seen proposals to build two tower blocks on the site of the Brunel Arcade and the demolition of the empty eyesore, the tented market, adjoining Wharf Green and its replacement with 68 flats in a 6-10 storey building with four restaurants and one shop at ground level.
Hopefully Swindon will generate sufficient new employment opportunities for new residents of these and other forthcoming new developments at Wichelstowe, New Eastern Villages, etc.
With the likely need for large volumes of Covid vaccines to be manufactured, possibly over many years, perhaps the Honda site will attract a vaccine manufacturer and bring much needed new jobs to Swindon in 2021?
Andrew Kilpatrick is managing director of commercial property agent Kilpatrick & Co www.kilpatrick-cpc.co.uk